All eyes were on Nvidia (NVDA 0.09%) once again on Wednesday when the artificial intelligence (AI) leader released its first-quarter earnings report, and it did not disappoint. Overall revenue jumped 69% from the quarter a year ago to $44.1 billion, which beat estimates at $43.3 billion. The company posted another round of blistering growth in the data center segment, where it's driving the AI revolution. Data center revenue jumped 73% to $39.1 billion.
Further down the income statement, gross margin -- adjusted for a $4.5 billion write-down for its H20 chips that were designed for the Chinese market -- was 71.3%. On the bottom line, the company reported adjusted earnings per share of $0.81, beating the consensus. Without the H20 charge, Nvidia would have reported $0.96 in adjusted earnings per share.
Looking ahead to the second quarter, Nvidia again faces the sting of the chip export restrictions, but it is still calling for $45 billion in revenue ($8 billion lower than it would have been without the chip export restrictions).
Investors seemed happy with the report, and Nvidia stock finished the after-hours session with a gain of 4.9%. Interestingly, a different AI stock, CoreWeave (CRWV 5.30%), outperformed Nvidia in the after-hours session, gaining 5.6%.
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The CoreWeave connection
CoreWeave is an operator of generative AI-focused cloud computing services, allowing companies to rent AI computing power (much of which is built using Nvidia chips) as needed.
Nvidia is a major customer of CoreWeave and a key investor. CoreWeave stock rose earlier in May after Nvidia disclosed a stake in the stock, at 24.2 million shares that are now worth more than $2.5 billion, or significantly more than Nvidia paid for them when CoreWeave went public in late March 2025.
Because CoreWeave is much smaller than Nvidia, at a market cap of $60 billion, and its stock is more volatile, it acts as something like a supercharged version of Nvidia with even more exposure to AI. The recent IPO takes advantage of the company's skyrocketing growth, but also helps it deal with wide losses created by its need to spend on Nvidia components and physical infrastructure for its business.
In its first public quarter, CoreWeave revenue jumped 420% to $981.6 million. Its net loss expanded from $129.2 million to $314.6 million in part due to costs associated with its IPO, including share-based compensation, and its interest expense ballooned from $40.7 million to $263.8 million.
Adjusted operating income, which excludes share-based compensation, jumped from $25 million to $162.6 million, showing that the underlying business is profitable.
Why CoreWeave could outperform Nvidia
Nvidia is still driving the AI narrative, as it's the clear leader in supplying data centers with the GPUs and other components they need to become "AI Factories." However, the stock's upside is more limited, as much of its potential growth in AI is already priced into the stock. At a market cap of $3.3 trillion, it will take a lot for Nvidia to surprise investors at this point.
CoreWeave's potential, on the other hand, is less understood and harder to model. As a new stock, investors are still figuring out its business model and whether it will be profitable over the long term.
Nvidia's earnings report adds another reason to be confident in CoreWeave's growth as demand for AI infrastructure remains strong. We've already heard from Nvidia's big tech peers, and capex forecasts remain strong. As Nvidia pushes full speed ahead with its AI factories, CoreWeave's growth prospects look strong too.
If you're bullish on Nvidia's prospects, investing in CoreWeave seems like a smart move. Nvidia's AI infrastructure partner has already doubled since its March 28 IPO, and could rally further if AI demand remains strong. Based on Nvidia's latest update, the bull case for both stocks seems as strong as ever.
